At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.
In the US, the Telephone Consumer Protection Act ("TCPA") does not allow unsolicited calls from people or companies such as debt collection agencies to be made to telephone numbers from automated telephone dialer systems where the consumer pays for inbound telephone calls.
One consumer in the US had his residential telephone line converted to a Voice over Internet Protocol line ("VoIP") whereby he was then charged for inbound telephone calls (on the old connection he was not).
A debt collector contacted the consumer 37 times. The consumer advised the debt collector that he had not given consent to contact him on the number and that he was receiving charges for the calls the collection agency was making. The collector phone a further three times after this notification and request.
The consumer took the debt collector to Court and won, arguing that automated calls placed to users who pay for inbound calls breached the TCPA. The debt collection agency argued they were exempt from the TCPA because the calls were made to a residential line for a commercial purpose under an exemption ("the residential line" provision).
In Australia, our telecommunications are setup differently whereby inbound calls are generally not charged to any device (mobile or fixed line). Whereas in the US, it is typical for mobile phone users and VoIP users to receive charges for inbound telephone calls.
This article was sourced from ACA International on 9 October 2014
So just how does the ACCC and ASIC Guide to Debt Collection deal with new emerging ways of contacting debtors such as social media platforms?
In making contact with a debtor Section 1 of the guide to debt collection provides:
(e) If you elect to use emerging technology to attempt to or make contact with the debtor, you should carefully consider the particular channel and its potential audience. It may be acceptable to attempt contact via emerging technology provided:
(f) You should avoid contacting the debtor via a certain channel (whether it is an emerging technology or a more traditional channel of communication) if:
Section 3 of the guide incorporates emerging technologies such as social media into contact;
(a) ‘Contact’ with the debtor or other person is interpreted widely. It includes, but is not limited to,the following:
Section 5 of the guide deals with emerging technology and frequency of contact
Telephone and other contacts (including letters, emails, text or telephone messages, social media channels)
(e) Unnecessary or unreasonable contact by letter, email, SMS, telephone messages (whether left on a voicemail service, an answering machine or with a third party), or by the use of social media channels or other technology must also be avoided.
Example: Contact using social media
If you use social media such as Facebook to contact the debtor, then you must ensure such contact is not excessive and is always for a reasonable purpose; otherwise the contact may amount to undue harassment. You must also observe your privacy obligations when using such forums to make contact with the debtor.
Section 8 of the guide deals with privacy;
(f) Caution should be exercised when leaving messages for the debtor that may be seen or accessed by
third parties, for example....:
Section 17 of the guide deals with conduct towards the debtor;
(b) You should never;
In the glossary to the guide and within the definition of communication;
Communicate: unless otherwise specified, includes communication by telephone, mobile telephone, fax, email, letter, in writing via text message or online technology (such as social media channels), and in person.
In the US, Texas, a debt collection agency allegedly, NCA (National Credit Adjusters) referred to several consumers as criminals in correspondence with them.
In each case, the debt collection agency (NCA) had purchased or been assigned the debts for collection.
In attempting to collect the debts, NCA allegedly made daily phone calls to mobile phones and the debtors workplace, and threatened to take the debtors to court in addition to referring to them as criminals.
The debtors are claiming that the Fair Debt Collection Practices Act and Telephone Consumer Protection Act have been breached.
In Australia, this type of alleged activity would certainly be against the ACCC and ASIC Guide to Debt Collection, The Competition and Consumer Act and possibly the Privacy Act.
This article was sourced from www.setexasrecord.com/news
In the US, West Virginia, a debt collection agency is being sued for not stopping phone calls after a man engaged a lawyer.
In addition to this, "robotic" phone calls were being made by an automated telephone system that did not empower the person being contacted to talk to a real person. Because of this, he was unable to tell the debt collection company he had retained a lawyer.
In the proceedings being brought against the debt collection agency they are claiming;
It would be interesting to see how this case would be handled under Australian Law. There are certainly elements of Privacy and debt collection action that may be against the ACCC and ASIC guide to debt collection.
A collection agency, National Attorney Collection Services Inc was pursued by the Federal Trade Commission for harassment. The agency was issuing envelopes where the exterior of the envelope had images of people being "shaken down" held upside down with money falling out of their pockets. The agency was also accused of disclosing debts to third parties including family, friends and work colleagues.
Some of the debts were related to payday loans with very high rates of interest.
The collection agency agreed to pay a civil penalty of US $1m. In addition to this, they were also required to have the consent of the debtor to contact via SMS, and that National Attorney Collection Services must cease all suggestions or references to being a law firm.
Expert Global Solutions, the worlds largest debt collection agency was fined US$3.2 million for violation of the Fair Debt Collection Practices Act. In breaching the FDCPA, Expert Global Solutions;
In addition to the fine, Expert Global solutions must;
The collector was jailed for 12 months for causing actual bodily harm and ordered to pay 500 pounds in compensation and 5,000 pounds in costs.
We reported on this article in April, and have recently had a
few questions about unconscionable conduct in debt collection. This is
an excellent example of why you can't use a fictitious debt collection
company or law firm in an attempt to collect debts.
Excite Mobile Pty Ltd has been found guilty in the Federal Court of acting unconscionably and using undue coercion when attempting to collect debts for mobile phone services. The Federal court also found Excite Mobile Pty Ltd engaged in false, misleading and unconscionable conduct.
Looking specifically at the charges pertaining to unconscionable conduct and debt collection, the Court found;
source ACCC v Excite Mobile Pty Ltd  FCA 350
This is an extreme example of what not to do when attempting to collect
debts. It also highlights the importance of attention to detail in the
debt collection process, ensuring your debt is valid, and that your debt
collection agency adheres to the law in pursuit of debts.
A case of abusive debt collection has been brought against a creditor (Community Health Center) and its collection agencies (Nationwide Collection Agencies and Receivables Management Partners Holdings) in the Federal Court (Detroit).
The Community Health Center believed they were owed
money from a debtor who was suffering from multiple sclerosis (MS) and
severe depression. However, the outstanding debt should have been paid
by Medicare or Worker's Compensation. The hospital and the debt
collection agent made "repeated, excessive and threatening" telephone
calls in an attempt to collect the mistaken debt.
During one debt collection call, a debt collector told the
debtor they would be arrested and "beaten and raped on the way to jail".
According to court proceedings, this made the debtor feel so depressed
that they attempted suicide by shooting themselves in the face. As a
result the debtor is now blind in one eye and cannot speak properly due
to damage suffered to the mouth.
Damages (actual, statutory, treble and punitive) are being sought for breaching the Fair Debt Collection Practices Act, the Michigan Collection Practices Act, the Fair Credit Reporting Act.
Sourced - court house news service - www.courthousenews.com/2013/04/30/57162.htm (June 2013)